When it comes time to get a new car, many of us ask the same question – should I finance or lease the vehicle? The answer to this question is not a
When it comes time to get a new car, many of us ask the same question – should I finance or lease the vehicle?
The answer to this question is not as straightforward as it seems. It depends on what you want from a car and your driving habits and style. It varies with what is important to you in relation to owning a car – and whether or not you find it necessary.
So keep reading to find out where you fit in this spectrum. After reading this article, some of you may go to a place like Hanes Leasing and lease your new car, while others may choose that financing the car is better.
In the end, the choice is yours.
What is car leasing?
Leasing a car works on the same principle as renting or leasing anything else – you pay an initial cost and then continue to pay monthly fees for as long as you drive the vehicle. (Some places don’t even ask for an initial down payment).
Once the contract ends (usually after three or five years), you’ll have the option to buy the car you’ve been driving for the past few years or get a new lease and send the dealership for a new car. holiday
Since you are not paying the total cost of the car, but only its expected depreciation (loss of value) over the lease term, your monthly payments are much lower than those associated with buying a car.
However, many car leases have annual mileage limits (varying between ten and fifteen thousand miles. So you’ll have to pay extra for every mile that goes over your allotted limit.
Most car lease deals come with at least basic insurance and maintenance, but this varies from one dealer to another.
However, most car dealers reserve the right to charge you for any “excessive wear and tear” done to the car, so unless you’re willing to pay more, you’ll have to pay a decent amount for it. take care
On the other hand, since leased cars are new, they are often covered by manufacturers’ warranties. Also, leasing is a great option for those who want to drive a car with all the latest technology and safety innovations as they can get a new vehicle every two years.
Note the word “drive” above – you don’t own the car you’re renting. This means that you cannot make any significant changes to its interior or exterior because you do not own it until you choose to buy it.
What about car financing?
Paying cash is the easiest way to finance a new car compared to leasing, because it’s the only way you won’t have to pay any interest.
However, when you feel like buying a new car, odds are you don’t have thousands of dollars to spare, you have a lot of options.
If you have the cash for it but prefer to make monthly payments, consider a car finance deal. There are many types of these deals, but most require an initial down payment and then a set amount to be paid each month. Keep in mind that you don’t own the car this way – it doesn’t until the final payment is made.
If you are planning to buy a car right away, consider taking a personal loan. If you get a loan at a low interest rate then this method can be useful for you. However, remember that your overall credit score affects those rates, so getting a loan may not be as easy for you as it is for someone with a good credit history.
Finally, you can use your credit card to finance your purchases. This is tricky because if you don’t pay your monthly rates, you could end up paying extra fees and higher interest rates. Not to mention that something like this can seriously damage your credit rating.